Royiatiko hotel is a clean, friendly place to stay in the old city of Nicosia. You really can't beat the location. It is right off the main road "Ledras" and a short walk to the border crossing if you want to go to Northern Cyprus for an hour or so. My only complaint was that breakfast was very lacking. We were glad to have brought our own food with us, as there wasn't much choice available, and what was available wasn't that great.
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